How the SBA serves underserved communities

By BERNARD J. PAPROCKI - 2/22/2013

Each January we honor the life and legacy of Dr. Martin Luther King Jr. Each February we celebrate the important milestones highlighted by Black History Month-reaffirming our commitment to helping individuals across this nation achieve the promise of the American dream.

At the U.S. Small Business Administration, we recognize that many Americans today continue to struggle to fulfill this American dream, especially in underserved communities-where times are tough, jobs are few, and many small businesses struggle. That is why we remain committed to lifting up these small businesses, especially in Rochester, so they can grow and create jobs in our community.

Although many underserved communities-which can include inner cities and rural areas and may include populations such as women, minorities, veterans, tribal groups and others-were disproportionately affected by the recent recession, the fact remains that minority-owned businesses and woman-owned businesses are some of the fastest-growing segments of the economy.

Together with our resource partners, the SBA is engaged at every level to help to all small businesses reach their full potential.

Loan programs: Across the country, and particularly in underserved communities, small business owners are often faced with the challenge of accessing the capital they need to start and grow their business. Through a variety of loan programs, the SBA can help you take this important step by facilitating a loan with a third-party lender, guaranteeing a bond, or helping businesses find venture capital.

One option may be the SBA's Small Loan Advantage Program, "SLA 2.0," which offers lenders the opportunity to invest in neighborhoods hit hardest by the recession, streamlining the process to get more loans into the hands of small businesses and entrepreneurs. SLA 2.0 also makes it easier to process low-dollar 7(a) loans by expanding the pool of lenders to include entities outside the SBA Preferred Lender Program. The loan limit for the program is $350,000 and banks may use their own documentation and underwriting process. (For more information and a complete listing of SBA's loan products, visit http://www.sba.gov/content/sba-loans.)

Another option is the SBA's network of Community Advantage lenders. These are non-profit, mission-based lenders who can originate SBA loans up $250,000 with a 7(a) guarantee. The SBA is working with these alternative lenders that have a reach into underserved communities to expand access to capital.

Free counseling: Starting a business can be daunting, but the SBA is uniquely positioned to help you find ways to start and grow your business, and to connect you with the local assistance you need to do just that. The SBA and our resource partners (which include Small Business Development Centers, Women Business Centers, SCORE, and Procurement Technical Assistance Centers) are committed to assisting small business owners with the diverse challenges they face at every stage of development. Don't know where to start? Visit www.sba/direct or contact your local SBA District Office at 585-263-6700 to learn what programs might be right for you.

Government contracting: Small businesses have access to nearly $100 billion worth of government contracts a year. In addition to connecting small businesses with capital, the SBA can help you compete for set-aside contracts in the federal marketplace through programs such as the Women Owned Business Certification Program, HUBZone Certification Program, and the 8(a) Business Development Program.

In particular, the 8(a) program offers a broad scope of assistance to help socially and economically disadvantaged entrepreneurs gain a foothold in government contracting. The program does not obtain contracts for small businesses, but instead helps a business position itself to compete successfully in the federal marketplace. Participation in the program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage.

Interested in learning more about how SBA can help your business? Staying connected is a key to success. Follow us on Twitter @SBAatlantic or Facebook at www.facebook.com/sbaatlantic and explore what the SBA has to offer at www.sba.gov.

Bernard J. Paprocki is the acting regional administrator for the U.S. Small Business Administration Region II covering New York, New Jersey, Puerto Rico and the U.S. Virgin Islands. He is also the district director for the SBA Syracuse District Office. 2/22/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.